Technical analysis of the gold markets
Gold markets retreated somewhat in the early hours of Monday, down about three-quarters of a percent, as traders continue to keep an eye on yields. Honestly, I think this situation has more to do with the fact that we’re somewhat range bound, and we just reached the top. If we can get above the $2,720 level, I think gold will likely go much higher. But as things stand right now, I think we still need to work on our inertia because, honestly, the market has risen so much over the last year that it kind of makes sense that we need to digest these gains.
If we were to fall below the USD 2,600 level, it opens the possibility of a decline towards the USD 2,550 level, followed by the USD 2,500 level, which is supported by the 200-day EMA. Either way, this is a market I don’t really want to short, although I do think it’s likely to fall further again. I prefer to buy dips in gold because there are plenty of reasons to think it could go even higher in the longer term.